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National Bank revokes licence of Dubai firm

May Kunmakara / Khmer Times Share:
Dubai-based Royal Index claims it applied for a licence from the SECC to trade in gold. Reuters

The National Bank of Cambodia yesterday revoked the licence of Dubai-based Royal Index Pte., an affiliate of Royal Index UAE, after it failed to fulfill its mandatory obligations as a derivatives trading firm operating in the kingdom.
According to documents seen by Khmer Times, Royal Index was registered in 2015 as a company dealing with the import and export of precious stones.
However, the company diversified its business to also operate as a financial consultant and a derivatives trader. Derivatives are financial contracts that derive their value from an underlying asset. These could be stocks, indices, commodities, currencies, exchange rates, or the rate of interest.
Risk-loving investors like speculators conduct risky, contrarian trades with derivatives to improve profits.
“We would like to inform the president of Royal Index Pte. that the National Bank of Cambodia hereby terminates the license of the Royal Index Pte. due to the company failing to fulfill their obligations as required by the central bank,” stated the NBC announcement.
A derivatives company has to park at least $5 million at the NBC and another $250,000 for its derivatives broker license.
According to the NBC every company that is willing to get regulated has to maintain compliance with the Securities Exchange Commission of Cambodia (SECC) on human resources, with the broker’s representatives having to go through an exam and obtain operational licenses.
Brokers also need registration at the Ministry of Commerce and the general department of taxation.
“We actually applied for a derivatives trading licence from the SECC to do forex trading and trading in metals like gold and silver. For the past five months, however, our business has not been running well,” said a former employee of Royal Index Pte. who did not want to be named.
According to Royal Index’s website, the company is a joint venture between Asia FX Pte. Ltd. and Al Taweela General Trading based in Abu Dhabi.

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